In Australia, the bailed-out get to decide where the money goes:
Westpac chief executive Peter King said the bank is considering its capital position and whether it may be forced to suspend dividend payments, while also crunching the numbers on bad debts caused by coronavirus relief measures.
On his first full day in the job, the newly minted CEO said its decision on dividends would be unveiled at the half-year results in May, after action by the Reserve Bank of New Zealand and other central banks sparked fears about a possible suspension across the big four banks.
“In relation to Westpac and our dividends, that is a decision we will make in May and it is one of a number of important decisions we will make,” Mr King told the public broadcaster on Friday.
Citi sees the cuts coming anyway:
Despite limited credit quality issues to be evident by early May, as well as the ability to absorb the NZ dividend suspension through their existing level 1 capital ratios, we believe the major banks will likely bring forward dividend cuts to May, knowing that these dividends were likely to be cut in 2H20 on higher (bad and doubtful debts).
As they should. They will need capital.
The question is, what is the point of APRA existing at all if its only function is resolution after the fact?
Furlough it until someone collapses and save us all the time and money.
